§ 30:129 — Powers, duties, and authority of board; pooling agreements; operating units; fees

Louisiana § 30:129

• Jurisdiction: Louisiana
• Title 30: Mortgages and Privileges

Text

§129. Powers, duties, and authority of board; pooling agreements; operating units; fees
A. The board shall have full supervision of all mineral leases granted by the state,
in order that it may determine that the terms of these leases are fully complied with, and it
has general authority to take any action for the protection of the interests of the state. The
board shall take all appropriate action, including the recovery of nonproducing leased acreage
whenever possible, to assure that undeveloped or nonproducing state lands and water
bottoms are reasonably and prudently explored, developed, and produced for the public good.
It may institute actions to annul a lease upon any legal ground. The board has authority to
enter into agreements or to amend a lease in whatever manner may most benefit the state.
It may join in pooling and unitization agreements covering state lands and water bottoms,
and mineral and royalty rights in, to, and under state lands and water bottoms either alone or
in conjunction with any other lease, mineral, or royalty rights in and under any other
property, so as to create, by the agreement, one or more pooled units. The board may agree
in the event of production of minerals from any unit so created, that the state shall receive
and accept on account of production, whether or not production is from any part of the state
property within the unit, a share of unit production or proceeds proportionate to that part of
the production or proceeds which the state is fairly entitled to receive under the unit
agreement. In determining this proportionate part which the state may receive, the board may
consider the surface acreage, the estimated original reserves in place, the estimated ultimate
recovery, sand thickness, porosity, permeability as determined by approved engineering
practices, and any other relevant factors. This proportionate share of unit production or
proceeds shall be in lieu of all other royalties or other payments which would accrue to the
state on account of production from, or attributable to, any part of the state property included
in the unit. The office of mineral resources may collect a fee of five hundred dollars to cover
the cost of docketing and advertising any instrument related to the administration of mineral
leases under the provisions of this Part. In addition, the office may collect a fee of thirty-five
dollars per hour for each hour or portion thereof spent in verification of claims, disputes, or
questions pertaining to the terms, conditions, obligations, and duties expressed or implied
in the state mineral lease.
B.(1)(a) "Operating unit" as herein used means that number of surface acres of land
which, under regular or special rules of the secretary or other authority having control in the
premises, or by agreement of the lessors, lessees, and mineral and royalty owners, may be
pooled and unitized for development and operation as a unit. An agreement creating an
operating unit may provide for cycling, recycling, pressure maintenance, or repressuring in
fields productive of oil, gas, and gas from which condensate, distillate, or other product may
be separated or extracted.
(b) "Reworking operations" means the good faith downhole work performed on a
well after its completion in a good faith effort to secure production where there has been
none, restore production that has ceased, or increased production.
(c) "Commencement of operations for the drilling of a well" means actual spudding
in of a well with drilling equipment adequate for the good faith drilling of a well to a depth
that is reasonably calculated to establish oil and gas production affecting the lands where
such well is commenced.
(2) The commencement of operations for the drilling of a well, the conducting of
reworking operations, or production of minerals on any portion of a unit which embraces all
or any part of the property covered by a contract of lease in effect on August 1, 1991 or
thereafter shall have the same effect, under the terms of the lease as if it had occurred on the
lands embraced by the lease.
(3) However, each mineral lease contract entered into by the board after August 1,
1991, shall contain a clause, commonly referred to as a "Pugh clause", which shall provide
that the commencement of operations for the drilling of a well, the conducting of reworking
operations, or production of minerals, on any portion of a unit which embraces all or any part
of the property covered by such lease shall maintain the lease in effect under the terms of the
lease only as to the part of the leased property embraced by the unit. The clause may provide
that the acreage outside the unit(s) may be maintained by any means covered by the lease,
but if by rental payments, then such payment may be reduced proportionately to the amount
of acreage included in the unit as it bears to the total acreage in the lease, provided that the
rental per acre on the outside acreage shall not be less than one-half of the cash payment paid
for the lease per acre nor shall the lease on the non-unitized acreage be extended more than
two years beyond the primary term.

Legislative History

Amended by Acts 1950, No. 46, §1. Acts 1986, No. 764, §1; Acts 1991, No. 786, §1, eff. July 19, 1991; Acts 1997, No. 229, §1; Acts 2002, 1st Ex. Sess., No. 106, §1, eff. April 18, 2002; Acts 2024, 3rd Ex. Sess., No. 17, §1, eff. Jan. 1, 2025; Acts 2025, No. 458, §1, eff. Oct. 1, 2025.